South Korean financial support and regulatory reforms

The South Korean Financial Services Commission (FSC) has initiated several measures to bolster regional and inclusive finance. The FSC announced a plan to supply 4.5 trillion won in low-interest guaranteed loans over three years to small, medium, and mid-sized enterprises located outside the Seoul metropolitan area. This program aims to support approximately 9,000 companies across 14 provinces and cities. To protect smaller vendors, the FSC also plans to shorten the maturity period for accounts receivable to within 60 days by February 2027 and abolish the right of recourse for new accounts receivable-backed loans starting in January 2027.

Concurrently, South Korea’s five major financial groups reported providing 16.01 trillion won in inclusive finance as of late September. This increase in funding aligns with the FSC’s preparation of a comprehensive evaluation system designed to assess banks on governance, fund supply, debt restructuring, and social consideration. In response to these upcoming regulatory evaluations, major institutions such as NH Nonghyup Financial, Hana Financial, and Shinhan Financial are restructuring their organizations, including the appointment of dedicated officers and committees to manage inclusive finance initiatives.